British Gas scraps energy rate 6 million people are on

BRITAIN’S biggest energy firm has announced plans to scrap its standard variable tariff (SVT) in a breakthrough for consumers battling a record high in the cost of living.

On Monday, British Gas said it will no longer roll customers onto standard variable tariffs from next April - signalling the beginning of the end for the controversial price plans - which are amongst the most expensive in the market.

It comes after draft legislation designed to lower the cost of energy bills was published by the Government, which would give energy regulator Ofgem the power to cap SVTs.

British Gas is the second firm to amend its rules on such plans. Last week rival energy firm E.ON said SVTs will no longer be the default option for customers coming to the end of their existing tariffs.

SVTs are usually among the most expensive energy plans. Six million British Gas customers are believed to be on the tariff.

Chief executive of British Gas parent firm Centrica, Iain Conn, said: “We fully recognise that the energy market can and should be improved, but further price controls will only set this back.

“We believe more action is needed and are ready to play a leading role. Today we have set out the unilateral actions we will take to improve the UK energy market for our customers.

“This starts with the withdrawal of the SVT which contributes to lower levels of customer engagement.

“We also believe that further measures by Ofgem and the Government are required so that together we can create a market that works for everyone, where there is improved trans- parency and a fairer allocation of costs currently included in the energy bill.”

British Gas said it contacted all of its SVT customers in the first half of 2017, and added that 10 per cent switched away from these plans as a result.

In April, these plans will no longer be the default option for those who reach the end of their fixed contracts - instead they’ll be offered a series of fixed deals instead.

The company has also said it will provide new new offers “to respond to customers’ changing needs”, introduce simpler bills for all customers and improve customer service.

Richard Neudegg, head of regulation at uSwitch.com added: “These initiatives by British Gas have the potential to effect positive change for its customers, if it makes it easier for them to make choices about their energy.

“However, what remains to be seen is if customers rolled onto a new fixed deal with British Gas end up finding themselves on another poor value standard tariff by another name.”

Neudegg adds that while British Gas may have scrapped its most expensive plan, households are still at risk of losing out.

“Energy customers looking to save the most money should carry out a comparison of tariffs from other suppliers - there are savings of up to £491 on offer.

“British Gas joins a line-up of many of the big six now looking to move away from Standard Variable Tariffs. Competition in the energy market is driving forward progress for all consumers, and the Government must be careful not to halt positive initiatives in going blindly for